Exploring the World of Direct Mail Marketing

ABOUT THIS EPISODE

While marketers are obsessed with all things digital, direct mail marketing is alive and well.

There's huge value in being able to target people by their physical addresses. As important, brands that leverage direct mail marketing are seeing impressive ROI.

In this episode of Marketing Spark, Postie CEO Dave Fink talks about why direct mail is viable option for many brands and how it liberates marketers from dealing with tech giants like Facebook and Google.

Dave also talk about his experiences as one of the first investors in Dollar Shave Club and what it was like to work with founder Michael Dubin.

Hi, it's Mark Evans and you're listening to marketing spark, which features conversations with entrepreneurs and marketers about business, sales and, of course, marketing. Many brands are heavily invested in Directmail to attract and engage prospects of customers. Directmail can be personalized, tracked, drive online and offline sales and support the entire customer journey. They think the CEO and founder of post he lives and breeze in this world as a direct male expert. In today's episode of marketing spark we're going to take a deep dive into direct mail marketing and how it plays with social media and other platforms whilcome to marketing spark. Thanks for having me. I've listened to bunch of other podcast interviews that you've given and obviously the sexy part of your story is your involvement with Dollar Shave Club. Everyone knows how successful that was and how marketing played such an amazing role in driving them brand and ultimately billion dollar acquisition by you know. Let Walk me through your journey with dollar shape club, which I guess started with an incubator or an accelerator called science ink. That's correct. Look, it's it is a fascinating story and I've never seen anything quite like it before. That entire story really unfolded in four years, which I guess Internet time is is maybe eight years or ten years. But when you think of an entrepreneur starting with an idea, a category of prodctor service they want to disrupt or improve and bring that to market, drive awareness, become really a household name globally, scare the pants off of fifty billion dollar incmbent and then get acquired for ten figure plus outcome. That that's that. That doesn't happen very often. My moomb and, yeah, I got to see it from the start. So I was a partner at a at a text studio in Santa Monica called Science, and we had a focus on on marketing, technology, investments and and a business creation as well as directed consumer brands. So now I think we're all buying from brands that that that were created online and directed direct consumer way, but it's still pretty pretty early. Back in I think this is two thousand and eleven. And and Mike Duben, who is a first time entrepreneur but a very experience, I think, creative mind, had had this idea to go right at the men's grooming sector, starting with with razors, which I think everybody said considered that business suicide. No one really had been able to put a dent into Jillette for for many, many years, and and that was because they own retail distribution, wholesale distribution and and the world changed. And so literally Mike showed up and and was looking to raise capital and figuring out ways to get this this concept off the ground and we just we were fortunate to enough to convince him to do it with us at science and and we were first money into his its venture. We saw the launch of the website, we saw that the creation and explosion of awareness through his amazing viral video and follow videos and we saw him grow a business that acquired, yeah, I think between three and four million subscribers within just a few short years. It was it was incredible. Let's take a step back. Mike Duben, very personable, charismatic, creative person, walks into your office with this idea of taking on Gillette and all the big razor makers. What was your first impression? Were you impressed by his the way he carried himself? Were you impressed by his vision or his audacity? Why did you decide to strike a partnership with Duben when he made the viral video and sort of emerge at this very dynamic entrepreneur? Was Easy to see to see why. Yeah,...

...that makes sense. What's spurred on your involvement with Mike and the dollar shape club? Yeah, so at that point subscription commerce, which I think is a pretty common method for indigital consumers these days, was kind of just becoming a common business model and it was a thesis that we were spending a lot of time researching, playing thinking about right in the state, this idea of how do you who both introduce consumers to or prospect consumers to your product offering, and then how do you think about investing advertising dollars to acquire consumers at scale? And one of the methods is, as probably many of your listeners think about, is is this idea of understanding what your customer requisition cost is and then understanding what your expected lifetime value and lifetime margin is of that customer to know just how aggressively you can kind of spend into your growth. One of the things that was was interesting about subscription commerce is there's, in theory, there's a built in lifetime value because you're not just acquiring a onetime transaction like you may do it at a wall grains or a CDs or logs or whatnot, but your acquire a customer that's buying into this idea of being a part of a club or accepting the convenience along with the quality product or fair pricing that you can direct to consumer. To us, what was interesting is that that this fell smack within that category of an obvious need or consumer willingness to engage in commit to this idea of subscription. It's a consumable product. You go through razor cartridges. There was kind of a built in, you know mechanic, whereas there are other businesses that we've all seen where they'd like tried to force this subscription model into business that that doesn't necessarily make sense. I don't need a new pair of shoes every three months. I might like a new pair of shoes every three months, but I don't know when my souls are going to wear out or what not. But with razors you generally know that each month you need more blade. That that was a pew that was appeal one just kind of that that that business model appeal to was. I mean, look, but Mike is, as you you have said, he's just a dynamic, larger than life personality. Had A tremendous amount of passion, he had incredible motivation and he had this vision of telling, of kind of cracking this this kind of formula of digital storytelling in an air and where social media was just becoming social media. We all take for granted what Youtube is and what facebook is now, but just eleven years ago those platforms still existed, but marketers had not yet figured out how to crack the formula of how to engage consumers and delight consumers through those platforms at that time. And and Mike had a bit of a twinkle in his eye and the nature of his background had a well positioned to be a storyteller first as a marketer and then maybe a customer acquisition engine second. So you put those those together and and it seemed like an interesting project to engage with. I am not going to claim that any of US had any idea that he was going to launch this video, it was going to go viral over night and he was going to be sold out and and scramming to figure out how to build his infrastructure literally overnight. That that no one could have predicted, or certainly we didn't. Yeah, when people look at the success of dollar shape club, they focus laser focus on that viral video which he made for a few thousand bucks and open the Budgate for sales and a arguably a global brand. When you, as a marketer, look at dollar shaped clubs success, aside from the viral video, what do you see as some of the things that dollar shape club was really effectively allowed to embrace? What did it do well? What did it stand out and and how would those marking decisions made? They did a lot of things really well. I mean you obviously don't have that level of success if you didn't do a lot of things well, and you know, I think you have. Mike's traveled around the world speaking to business...

...school classes and NBA programs trying to deconstruct some of that success. When I look at it, first and foremost, and I've talked about this in some of the the other podcast conversations I've had, and I really truly believe in it, that there are there two types of businesses that I've seen created and had the benefit of kind getting a front row seat to seeing dozens and dozens of businesses launched, just being in this this market, in this world, and then certainly being at a company that was built around investing in and launching startups. The kind of give big divide that I've seen is that there are those businesses that start out opportunistically and those businesses that at start out mission driven, and what I mean by that is there's no shorte of companies where the founders come from the industry that they're playing in with their next business. They had deep expert Keyes, they understand and supply chain or something about improving a product or service and and they have a business model that they know that they could that they could monetize, and and and and those are fine. There are lots of businesses that have been wildly successful built kind of opportunistically. To me, what's more interesting is these mission driven businesses, and I don't mean you're out trying to solve the most challenging problems in the world. What I mean is like you've uncovered a problem or a solution or a pain point that is real or even that there's a perception of in the consumer, site or business. A psyche and your mission driven around trying to solve that pain point. It could be really nuance and focused. It could be broad. Well, if you look at Dolla shape club, I mean from the start, as that amazing script and the viral video to you know, talked about, there was a bit of a pain point in in you know, in men's grooming and razors in particular. Razors were tract as the number one stolen item. And in retail there's a reason, like you feel like a criminal when you walk into a retail outlet and alarm goes off when you write lift the plastic in or you have to get someone to unlock the case to so that you could buy this product, and then you actually self like, well, why is that? For the same reason that vittle video talked about. There was, you know, one brand or one conglomer at that own eighty percent of the market could charge what they wanted to charge for a product. Probably were greatly overcharging for for this commodity. And we've all had the experience of good, you know, going through target check out and maybe we have like five items and you're like it's a hundred seventeen dollars and you like what in the world did I buy and you bought razordblades. That's crazy, like nobody wants to spend that kind of money and razor blades. Nobody really wants to even be shaving, probably like it's something we do because we have a choice so that the hair and a face will keep growing if we don't. That was Mike, I think, through his his really creative appurchase storytelling and being able to leverage social media at a time that it was less competitive than it is now and if you get things right you could really get a lot of our media, he was able to unlock that that kind of pent up frustration about yeah, yeah, Jul it is over charging me for these razors, like this is crazy, like why you like, why don't I have more consumer choice? Like this is nuts. And even the name of the company right, dollar, shape club. Right, most of the products were not a dollar, but just everything about that was this irreverent approach to be mission driven around the idea that look, there you can get an equally good shave for a lot less money and not feel like you're being taken advantage by I can glomer just because they can. That was really the beginning of all these direct consumer brands are waking up and saying like hey, like, don't buy this protect because it's what your parents bought thirty years ago, and don't use this toothpaste just because that's what you, you know, were told, that's what you were growing up on. Like, open up your eyes, ask your own questions, make your own decisions and then be a part of those brands that you think represent you and and I just think that that, more than anything, that dollar shape club got that right. When I work with BBS ASS companies, one of the challenges they face is that the marketing buffet is extensive. There's so many things that you can do. Inevitably you find startups that rally around one or two channels. For Dollar Shave Club, obviously...

...was video. For a lot of companies it could be social media or content marketing. How did you come around to, or what was the reason why you decided to focus on direct marketing, which is not a sexy as a video or our social media, but it's been around for a long time and it's super effective. Two questions. One is why your interest in direct marketing and how is post these approach to direct marketing different from all the other companies out there. Well, I have to amit. I love both those questions and Carson. So first and foremost, my comfort or Jonathan. I didn't come around to the mission of solving the direct Mount Space or problem or challenges in this in this channel. That that wasn't where it started. It really started a reaction to the big walled gardens that are certain search and social just gaining way too much power and and creating a lot of great value but also creating a lot of heartburn up and down. Brandon your executive teams and marketing teams. It trade is a state the dollar shape club era. Those were the golden ages of platforms like facebook and Google and Youtube, providing tools that we'd never seen before. Party is just the pure scale right. At one point, like everybody was on facebook and and it was ubiquitous with the Internet and it was really nice and convenient to be able to reach everyone on one website. Essentially, the sophistication tools and use of data and the emergence of machine learning and predictive modeling, all these things that we used to do but in a more analog way with less sophistication. Those channels really were able to invest in and it made us all look like really smart marketers and for a long time we got tremendous amounts of games. But we all have felt the pain point of Google Changing Algorithm and the bottom falling out of our search marketing, or facebook deciding that after milking tons of profits from US buying fans to our facebook, you know, fan pages and building the engagement on their platform, they're not going to turn around charges to reach those to those fans where you paid to acquire, and that has dramatic effects on our growth and our Panu. For us, with the kind of final Straw was like just the oversaturation every brand. You know, the beginning it was like the the disruptor brands that were finding out how to work on, how to manage, to man jet on Facebook, and then facebook did a great job pulling over lots of huge portions of brand advertising dollars. In the automotive manufacturers and entertainment platforms and CPG brands, etc. We're pumping lots of their their marketing budgets into those platforms and add rates go up and it seems like the Savva where we get it marking those platforms. We just can't. We can never catch up with the inflation on ad rates and so you never are able to run those channels profitably. So for us it was just a matter of okay, well, what's the next channel like? We we need to diversifier, medium mix, exactly what you were just talking about. And we first started looking at other digital channels and emerging channels and and there was nothing that had enough scale to make it worth the effort. Snap was just getting started. They didn't have an ad platform at that point. There was no tick tock. They're just there's just was nothing that ravel rivaled the scale of facebook, of a youtube, Google. We start spending more time offline and in offline. There are a lot of great channels, but but DM caught our tension attention again because a lot of the components of it are very, very similar to digital channels. It's a channel that a laws for for targeting and and applicable data use so that you can be razor focused on who you engage it. But there's direct measurement, you're able to understand who you're engaging with and you're able to triangulate. You know that conversion data. So what's working, what's not working from your marking experience and it's big and scalable. Every it's bigger than facebook. They're got to Google. Everybody has an address and and anyone with an addresses reachable through through direct mout you put those three things together, big...

...and scalable, lots of data, which makes it a test and optimizable channel, and direct measurement and the realities. It looks very similar to how we execute facebook campaigns and build campaigns. So that we got there. It wasn't a direct path to direct mail was a reaction to a big macro challenge we saw in the marketing landscape. Scott Galloway talks a lot about the digital duopoli between facebook and Google. And if you're a brand and you want to leverage advertise and you have no choice, you have to use one or the other. And at the same time I think a lot of marketers are scrambling because every single channel was chocol block with competitive options and everybody's trying to leverage them. Direct mail seems old school. Get it really seems like in some respects than an achronism, but it's not. I mean it's alive and it's well and brands are still using it. Do you think the modern marketers thinking about direct mail these days is it is it front and center to them, or do they have to be educated on the benefits, the impact and the fact that there are lots of ways to measure, because the modern marketer it's all about quantifying their performance. If they can show that they're doing the job, that's awesome, but with the rise of the dark web, which I want to talk to you about, those things are becoming less obtainable. I think the same mindset of marketers that first lifted facebook and thought there's something interesting here. Even before facebook was building add tools or two, your marketing tools to other own platform they were trying to figure out great ways to engage the facebook audience. Those same marketers are absolutely engage with direct mail and happen for a while and are recognizing the value and and we're trying to figure out ways to can infiltrate that channel in a very kind of test, an optimization and measurable way. We've seen it from the start and we've been at it about about six years now. With that being said, there's also a sea of really savvy brands that have relied on direct mail even through the digital era. This year. The last numbers that I saw published said there's going to be about fifty million dollar, sorry, fifty billion dollars, spent in direct mail I advertisers just in the US alone, and it's a non national election year. That just tells you something. ADD dollars are up in the channel and that's not happening by accident. That's partly because the I think we recognized, like the value of everything, has grown right the venture dollars that are flowing in bigger than ever. Consumer spending has never been stronger, expendable income has never been stronger, and so there there's opportunities to market into your target audience and more aggressive than ever before. But at the same time the platforms that you've relied on, mamely, facebook and Google, have become harder, harder to actually find profitable customers on, or at least beyond a certain ceiling of scale. Definitively, the savvy marketers that are cutting edge and forward thinking, ironically, are well aware of and very focused on on direct mail. I think type of advertisers are the ones that are on our platform or where have been for years, and and I were very grateful to have a company like like post you that was building technology to give them the same access to predictive modeling and measurement and targeting and programmatic capabilities. Then then can traditional methods of deploying direct mail. And every day we have more and more inbound markers and brands that either are looking for a better way to do direct mail, that have already kind of experimented with the channel and seen some positive benefit but are satisfied with the tools. And then we have new advertisers that are aware that their competitors are are deep in the channel and they don't have the experience and are looking for kind of the fastest path to scale and success with the channel. Without gettting too deep into the weeds, can you talk about how marketers,...

...how brands, can quantify their success with direct mail, because the model is that you do some targeting by geography, postal codes. If Code, however, you want to do that, then there's some kind of reaction happens. What are the metrics? What are the KPIS involved in direct mail? Yeah, so the beauty of direct mail is it's an addressible channel, meaning that it's not about contextual targeting or not about doesn't have to be about zip code targeting or senses block targeting or whatnot that some more traditional markers might remember. On the channel mental for it's an individual living in a household, the same way that it's one to one on programmatic or email or SMS or search or facebook. In a world where there's so much access to first party data within brands and an ability to really get to know and understand your consumer directly, you're not relying on understanding the basic demographics of Zip Code around a retail location that your product is sold and you're now selling directly to that consumer. Some portion of your revenues generated from directing summer cells and you can unlock a lot of insights into that. Those insights can be used to target on digital channels and can also be used to target on it. Through direct Mount Direct Mail, you're targeting individuals at specific addresses and when you're selling direct to consumer or you've a POS system that is capturing a one hundred and twenty identity map between a transactor and who that person is, a converter in that person. The posty platform. It's not the only one, but posty makes it clean and real time and simple to map that identity from a transaction back to the recipient of a piece of direct mount. But there's much deeper methods that we can certainly go into, fear boring talking to deeply up measurement. But any action where identity data can be captured, whether it's a mobile application action or a website action or pos action at a at a retail outlet, that captures that data, that can all be used in real time for cleanly to map back to audiences that received an add through through the mail. And and part of the game with measurement is then, you know, understanding not just what was successful in the past, but being able to make good decisions and that will deliver reliable, similar results the next time you execute that same strategy or tactic. We all think about like you actually mentioned as well, like measurement as as being this way to kind of justify that what we did is right. When I think about growing a business as a CEO, I think about measurement more as the confidence in believing that if I do more of what I just did, I'll get similar results and and direct mails. It is enables that. You could argue that many marketers have this myopic view of digital marketing. The marketing landscape is digital and many of them have been raised in an all digital, all web environment, so they don't know anything different magazine advertisements. To them, newspaper ads seemed like an achronisms more than anything else. How does a marketer blend digital marketing with direct mail? How did they create a value proposition in which one plus one equals three? Is it easy to do? Is it easy to get those two different vehicles to seamlessly work together? Look, nothing is easy. If it was easy, we'd all be launching, you know, brands and reaching certain levels of success. It's really hard to do. But I think your question is probably more when you take the savvy train marketer who's used to assipisticated sid of tools, it does direct mail or you know, army channel, become more difficult, and I think the answer is depends which channels that you're using and the clarity of measurement in them. There are just channels that are easier to measure and their channels where there's more transparency. facebook and Google have positives and negatives. They make it really easy to have complete transparency on their own platforms with their own reporting structures.

So you understand exactly what Google thinks your kpis are and what facebook thinks their Kpis are. They make it much harder to understand things like incrementality, your lift of using those add platforms on top of other channels, and that's something that's been going on for years and years and years. Right there's the argument of the first touch, first last touch, first medium mix, modeling and multi attribution and whatnot. Your direct mail is a unique channel in that you have a lot of variants in the KPIS that you're using at different times to measure effectiveness of your campaigns, the return ads been, etc. For example, there are times when you're in growth mode and your due north is the is the most amount of scale. It's a land grab and the most efficient cost per acquisition and if that you due north, direct mail as a channel can can play really nicely with your digital channel and help you understand exactly what your cost per acquisition from budget spent in direct mail is. You may be a more mature brand that's looking and saying we have a medium mix and we're more about profitability. Right now. It's not so much a land grab any new incremental channel. We also want to be able to see what the incremental effect over other channels are direct mail, because it's not a walled garden. It's not facebook owning the data and dictating what data they're going to give you and what data they're not going to give you. Oftentimes pump up and and make performance of add dollars on their platforms look better. Your direct mail you've control over. So if all of a sudden, what you're looking for is, how does this specific addressful audience within my target crm or my prospect poil perform when direct mail is added? What is the incrementality look like? What is the lift look like? Well, direct mail measurement or you know, has the capability to to show you exactly what the incremental value of that media spend looks like and really anything in between. To me that that's one of the things that are that beautiful. It can be dangerous as well, because direct mail offers more views in many times the cleaner view of a performance that even facebook or Google will, and so a market needs to come at the channel understanding that they need to look at different measurement tactics or strategies differently, that just use facebook. Says this is your last click CPA. That doesn't mean that there's any incrementality in the value of that add dollar. Those that do like that you count that channel. And if you're comparing last like facebook's EPA, to incremental you know lift on on direct mail that that probably is a dangerous comparison. But if you're looking at a like measurement, then I think you come to trust the direct mail channel bit more than you can trust your digital channels. Earlier in the conversation I mentioned the dark web and a lot of marketers are grappling with the idea that not everything can be quantified, given that in their experience in recent years everything is quantifiable. And I think a lot of marketers are trying to figure out how do they generate Roy how do they show their boss that what they're doing is working? How do they prove that they're doing what they're supposed to do? And I am curious about how direct mail fits into this whole dark web, dark social not terribly able to quantify what we're doing landscape. Well, the beauty of direct mail and those marketers who are engaging and explore the channel right now which which, if any of your listeners are not yet engaging the channel. Highly recommend them starting to as it becomes more and more difficult to measure performance online through changes an operating systems and privacy regulations, etc. The beauty of direct mail is that the match key is not a cookie, it's not in I ad track digital...

...fingerprint, it's it's a name and an address. And when you engage with the consumer that's willing to share name and address, they know exactly what data they're sharing with you and they're doing so in a very compliant, up front, transparent way which is respectful to the consumer and the brand is presenting respectful. But it also means that if Ios fourt team blows the cookie away, effect your abily to measure just as cleanly endirect mant because address still exists. The use government didn't take away our addresses. Right. That's not a thing, right, the way that apples can take away a cookie or demon irrelevant. We think a lot about that. Think per se that digital advertising is going to die in any respect, but some of the ease and transparency of what works online and what doesn't work online is not going to be so clean. There are going to be challenges. It's going to create some fits for marketers and brands. By the same token, I think what we're all going to see, I've done, you know, my own analysis and research through many times throughout the years, is that the Roi. The return to ad spend that some of these big walled gardens were telling us we were getting, we weren't actually getting. So we start pulling back, budgets and all, and we don't see the same, you know, proportionate decline in total conversions or total customers or revenue. And and I think that's just the byproduct is going to be. It's going to shed some light onto maybe some of the inaccurate to see and in an overliance on some of the performance Apis that these wall gardens were giving us access to. It's something that again for the life our company. Direct amount just doesn't have that same pain point. There's a lot more transparency and how measurement works because it is one to one, tied to you, an actual consumer, rating this effemeral digital representation of a consumer. Well, thanks for all the great insight about direct mail, something that I haven't explored in recent episodes of the podcast. One final question. Working People Learn more about you and post our website is filled with information, use cases, can studies, how to get started, etc. And is a request more information or functionality as well, and our team will get in touch with you. Certainly I'm always reach both through Linkedin. That kind of is might go to, so feel free to find me there, and I think that'll be good way to get every restarted well. Thanks for listening to another episode of marketing sparked. If you enjoyed the conversation, leave a review, subscribe by Apple podcast or your favorite podcast APP and share via social media. To learn more about how I help be TOB SASS companies as a fractional CMO strategic advisor and coach, send an email to mark a mark evans dots a, or connect with me on Linkedin. I'll talk to late.

In-Stream Audio Search

NEW

Search across all episodes within this podcast

Episodes (93)